The recent proposal by Yves to establish an EOS foundation suggests adding 1% of inflation to EOS (total inflation : 2%) in order to direct 1% out of the 2% to fund the EOS Foundation activities.
At the current average token price over the last 12 months, which is around 4 USD, the inflation from 1% is 38 mil$.
This is quite a good amount, since it allows the EOS Foundation to hire developers and kick start development, research, UX fixing, and marketing activities.
Why inflation rate doesn’t really matter to price
EOS’s inflation rate is 1%
Ethereum’s inflation rate is about 4%.
Polkadot’s inflation rate is about 10%
Both projects have surpassed EOS’s price performance by orders of magnitude during the last year.
Vitalik Buterin several times had complained, that the amount paid to miner security in the ethereum network is much more than the relatively miniscule amount paid to fund R&D efforts for the ethereum stack and that it seems absurd to him. What is more important? security or advancing the technology and making it more accessible?
Vitalik Buterin is not satisfied with Ethereum’s current spending rate. He wishes to spend more and to increase the R&D efforts, but unfortunately he didn’t get the social acceptance to do that.
Just having an additional 1% to the inflation rate can bring EOS’s spending and development efforts to the levels of mega projects that parallel ethereum and cardano.
What seems to be important is the futuristic inflation rate. We are selling the dream, the fantasy. Not what is helping us to get going right now. If EOS would be worth hundreds of dollars, then 0.25% inflation rate would clearly be enough for the EOS foundation and/or Eden. But not right now. Now is the time to act.
What seems to be important is not the current inflation rate, but that we can build a good community, a good tech, a positive community that attracts many others to our community. This can be achieved by improving and building, by innovating, by marketing, by giving grants and rewarding people who helped but received nothing in return, and by investing in other projects. But all of those activities require funds.
What is possible with large funding
By having at least 25 mil $ it can bring the R&D efforts to the levels that parallel ethereum’s (as it was in 2018-2019). This allows much needed infrastructure development for EOS, tools, utilities, UX changes, wallet development, services and APIs, and funding grants.
However, by having more money, some money can be dedicated to marketing efforts. Marketing can change the negative image of EOS and reverse the bearish trend EOS is having. By reversing the bear trend the proportional funding from inflation can even increase further along with the price.
What is possible with larger funding
By having even more funding (such as 2% inflation rate dedicated to the EOS foundation), an investment fund can be established, to give funding to good projects and companies with an agreement that the project will only use the EOS blockchain.
For an example, Terra Luna has a 150 mil $ investment fund that does just that.